Here is BofA head of quant and equity strategy Savita
Subramanian's explanation of how the indicator is calculated:

The Sell Side Indicator is based on our survey of the Wall Street
Strategists that submit their asset allocation recommendations to
us or to Bloomberg (currently, there are nine). For this
indicator, we use the simple average of the recommended equity
weighting for each strategist as of the last business day of each
month. The thresholds for the Buy and Sell readings are rolling
15-year +/- 1 standard deviations from the rolling 15-year mean
(previously, we had used cumulative standard deviations and
means).

We have found, when adding a little math, that Wall Street’s
consensus equity allocation has historically been a reliable
contrary indicator. In other words, it has been a bullish signal
when Wall Street was extremely bearish, and vice versa. The Sell
Side Indicator does not catch every rally or decline in the stock
market, but as you can see in Chart 2, the indicator has
historically had some predictive capability with respect to
subsequent 12-month S&P 500 total returns. Although the
r-squared of 27% might sound low, it is significantly higher than
similar statistics for typical variables used in stock market
timing models (Table 1). In particular, note that such heralded
indicators such as the “Fed Model” and money growth have
relatively little predictive value.

Here is the chart that shows the correlation between the
indicator and the S&P 500's subsequent 12-month return:

BofA Merrill
Lynch

And here is a table provided by BofA Merrill Lynch comparing the sell-side
indicator's predictive power against a few other familiar
strategies: